Wednesday, October 19th, 2011

I’ve been very impressed with the Rahm Emanuel administration so far in Chicago. He’s made a lot of good moves. These range from hiring Gabe Klein as transport commissioner to a plan to hike water rates that will enable to city to collect more from suburbanites. (I suggested as long as a year or two ago that privatizing water might be a good idea because it would enable the city to establish that revenue stream – I’m glad to see him thinking that way).

There’s more, but what I want to highlight today is a plan for the first steps towards congestion pricing in Chicago. I don’t believe a London style congestion charge makes sense in Chicago. Unlike with the City of London, business in the region is not as compelled to locate in the Loop, so maintaining convenient access there is important to business growth.

But that doesn’t mean there isn’t a role for congestion charges, and one of them is in parking. The Tribune reports that Emanuel plans to implement parking surcharges for downtown garages and lots during weekdays. The money will be used for transit capital improvements, including a new Green Line station at McCormick Place.

This is a great move. In fact, it was one of my recommendations from my transit plan from a couple years ago. Parking surcharges encourage people to use our existing (fixed cost) transit system, and can also make a nice stream of additional money for transit at a time it is desperately needed. Plus it is a way to make drivers pay for the congestion costs they impose on others.

Also, the fact that this is a weekday only charge is a step in the right direction towards variable pricing by government in response to demand. There’s a lower elasticity of demand for commute trips during the week, plus great transit alternatives for those who don’t want to pay to drive. Weekends have lower transit availability (particularly on Metra), and have a higher percentage of discretionary trips.

The Tribune ran a story in which some criticized the city for not including meters and not going with a pure congestion charging solution. Part of the problem is that the city’s parking meter lease has a fixed rate schedule embedded in it, which, while it could be changed, would be cumbersome to do so. I already directly highlighted how this lease constrains policy adaptations to changing conditions. It’s one of the bad attributes of the lease, but that’s not Rahm’s fault.

From a practical standpoint, a tax is the simplest way in the short term to make this work, particularly since such taxes are already collected today. There’s no reason that in the future the city can’t evolve towards a more pure congestion pricing model, but when you are trying to move fast, don’t let the perfect be the enemy of the good.

There is one thing I’ve heard causing anxiety out there. Private spaces in residential buildings would be exempt. But some downtown residents rent spaces in buildings they don’t live in and are concerned they are going to get zapped. I don’t know what the details of the proposal are, but I’d encourage the city to get out in front of this issue. If there’s no problem, then be sure to aggressively communicate why not. If there is, then probably some tweaks need to be made to avoid hurting bona fide full time downtown residents.

In any case, in my view this is a good proposal and part of a series of moves that are taking the city in the right direction.

13 Responses to “Rahm Emanuel Brings Congestion Pricing to Chicago”

I’ve seen congestion pricing at work in London and think it’s achieved a lot, so I’m inclined to support thinking about this in Chicago. But there’s a problem, possibly a fatal one, at least at this stage. The aim of congestion pricing is to encourage/force drivers to use the alternative, which is public transporation. A prerequisite, naturally,s a good and comprehensive public transporation system. London’s got one: you can get from almost anywhere to anywhere within the London metro on the Tube, buses or British Rail. Because Chicago’s sprawl has long since left th metro’s public transporation system behind, this isn’t true here. Hence, congestio n pricing here would work a hardship on people who built predictable driving expenses into their decision to buy in the suburbs or exurbs. Yes, we want to discourage this sprawl. Yes, we want to increase density. Yes, I wish these people hadn’t bought way out there in the first place. Yes, we want them to move back into the city, or at least near rail hubs. Yes, we want to encourage construction of a comprehensive public transportation system. Yes, we want to have all these good things, just like London. But until that dawn, it does seem unfair to hit these people with an unexpected expense, just because they chose years ago to seek a little bit of green in the land beyond O’Hare.

“Because Chicago’s sprawl has long since left th metro’s public transporation system behind, this isn’t true here. Hence, congestion pricing here would work a hardship on people who built predictable driving expenses into their decision to buy in the suburbs or exurbs.”

I feel bad for people who chose to live in exurbs, not too bad though.

I am not sure what you are referring to, but at this stage Mayor Emanuel’s congestion fee only targets those making trips downtown during weekdays. While the inadequacies of Chicago’s mass transit system are known, one thing the system is very effective at is getting people throughout the region into the central core. That is why I agree with Aaron that this is the right kind of policy for Chicago.

These surcharges apply only in the central business district. These are areas that are presently well served by transit from all directions, including far out reaches such as Kenosha, South Bend, and Harvard.

Additionally, if revenues are to be raised, the question then becomes, from where? Some commuters might be burdened by this. But it has the virtues of charging people for the congestion they cause and encouraging transit use. Other taxes or fees would sock somebody just as well, without those virtues. Hence I’m inclined to support.

Aaron, it is my understanding that the “congestion fee” will apply to lots and garages not only in the Loop, but in River North.

I don’t know whether it will apply in Streeterville or the South Loop. Given that part of the money will be used to develop BRT between the west loop commuter stations and Streeterville/Navy Pier, charges to that neighborhood may also be considered in the future, if not now.

You say that private spaces in residential buildings would be exempt? That is very interesting. Currently, I drive to the Loop for work and park in a parking garage in a residential building. The rate is $8/day with “early bird” pricing.

Considering that it is only $4 more than taking the bus everyday, the cost is worth the time and convenience. I wonder if this parking garage will be exempt from the tax? If so, will the building owner increase the rate and make more profit?

I would really prefer to use transit. However, the buses have to use city streets that are clogged with vehicle traffic. This adds considerable time during rush hours. I hope the advent of some type congestion pricing starts to tip the balance more towards making transit options work efficiently. As an example, If I take transit, I usually ride an express bus that travels the Lake Shore Drive expressway. Without traffic the commute would be 35 minutes (only a few minutes longer than driving). The rush hour traffic on LSD adds anywhere from 15-45 minutes. If there were fewer cars on the road, and bus lanes on LSD, there is no question that the bus would be the better option than driving.

I’ll be the contrarian voice of the taxpayer here. While there are a couple good ideas here and there from Emanuel (just as there was under Daley), the cost for them is so out of proportion that it is hard to give plaudits to the Mayor. The corruption, inefficiency and sky high taxes have only gone unchecked under Rahm to consolidate his power and in the case of taxes have skyrockets even higher with all of his fee increases and max property tax increase by the Chicago Public Schools. And Rahm’s penchant for spinning and exaggerating prompts laughter at best. So enjoy this humorous YouTube video about our PR-obsessed mayor: http://tinyurl.com/44msscl

I myself own a parking spot in a downtown Chicago condo building and lease it out to a downtown worker.

As much as it pains me to say it, I think the city should also charge a fee to those who are leasing out these spaces. As long as there is such a large “shadow” inventory of downtown parkers who aren’t paying fees, it will be difficult to fully implement a congestion tax.

What other people do with their parking spaces is, justly, their own business, but it’s possible that the market rate of spaces is higher than it is with all the city-owned garages in town holding their prices down. Or maybe the space is better used as an office building or hotel.

In either case the city should be out of the parking garage business.

I noticed that part of one parking garage near the Sears Tower was converted into a Dunkin’ Donuts, among other businesses in that strip mall. We need more of that, so far as the market demands it.

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